Vancouver homeowners are rushing to fill their empty mansions to avoid a new tax law - and college kids are snapping them up for dirt cheap
- College kids are renting mansions in Vancouver for cheap, reported Natalie Wong and Natalie Obiko Pearson of Bloomberg.
- Mansion owners in Vancouver are trying to rent their empty homes to avoid new taxes that have been implemented to bring expensive housing prices down.
- Vancouver is heading for a "bumpy landing," according to an economist, and an excess supply could be coming within a couple of years.
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In Vancouver, college kids are living large.
According to Natalie Wong and Natalie Obiko Pearson of Bloomberg, more Vancouver mansions are being rented by owners trying to dodge a new tax on empty homes - and young adults are snapping them up. "In the new world of Vancouver's housing market, where Chinese investors are decamping and low-ball offers are the norm, students can find themselves living in the lap of luxury," they wrote.
Fourteen students are paying C$1,100 ($825) a month for a nine-bedroom home with a steam room and billiards called "The Castle," Wong and Obiko Pearson said. And there are houses worth C$4 million (roughly $3 million) renting for C$4,500 ($3,378), a realtor told them.
Just three years ago, property in Vancouver was thriving, with prices twice as high as they were a decade prior, Wong and Obiko Pearson reported. To reign in prices, the government implemented new policies, like taxes and tighter mortgage regulations, which have caused a decrease in sales - "the weakest since the global financial crisis," they said.
Vancouver was one of Canada's most expensive housing markets that slowed sharply in 2017 following new mortgage regulation and higher rates, reported Business Insider's Gina Heeb. While Toronto showed signs of stabilization, Vancouver's housing market, which is more overvalued, isn't posed to fare as well.
An economist recently predicted that the Vancouver housing market is heading for a "bumpy landing." According to Heeb, last fall, home listings in the city hit the highest they've been since 2014, and an excess supply could be on the rise within the next couple of years.
"With taxes on an empty Vancouver home potentially adding up to 3% in annual levies, homeowners are rushing to lease their homes, according to real estate agents," Wong and Obiko Pearson wrote. "That's leading to bargains in a city where the vacancy rate has been near 0%."